More than 95 percent of the people who do not have electricity live in Sub-Saharan Africa and the least developed parts of Asia. 80 percent of these live in rural areas.2 Reliable and effective light sources generate beneficial social, environmental and economic effects; children and young people are able to do their homework after it gets dark, shops can be open longer, and the outdoor environment is safer, not least for women.3 Reliable power also enables entrepreneurs to open new businesses. These entrepreneurs can then plan around reliable 24/7 power and can use electricity as a tool to significantly increase local economic activities.
Experience from India benefits Tanzania
Husk Power Systems is a company, which produces and distributes renewable electricity 24/7 via its own mini-grids. Its customers are households, shops and microbusinesses in rural areas. Husk began its operations in the Indian states of Bihar and Uttar Pradesh. After eight years, the company is taking its experience to remote rural areas of Tanzania, where over 80 percent of the population have no access to the national grid at all.4
“Husk wants to be a part of the solution to one of the great social challenges: increasing access to reliable electricity for the people. I myself studied by candlelight, and I am well aware of how vital reliable electricity and good light is in increasing people’s opportunities to lift themselves out of poverty,” says Manoj Sinha, CEO, Husk Power Systems.
Biomass reduces CO2 emissions
Solar energy and biomass are the primary energy sources used to produce electricity in Husk’s plants. The biomass most often used is rice husk, a by-product of milling rice crop that Husk purchase from local rice mills. Husk uses a proprietary system that combines and synchronizes solar PV power plant and biomass gasification power plant to generate 100% renewable power and each 50kW system eliminates approximately 600 tons of CO2 per year. Husk has already qualified its biomass gasification system for CDM mechanism with UNFCCC.
Local engagement vital
When the options for setting up a new power station are being evaluated, the first step is to hold discussions with the local community. This relationship is vital, as they will be future customers, and Husk will want to employ a local workforce.
“Local engagement is central for us. We are dependent on the local population both to obtain material for the biomass and to avoid theft and sabotage. But above all we want to have an open and close relationship, since that is absolutely essential if we are to be successful in creating progress,” says Manoj Sinha.
Massive expansion gives Swedfund the opportunity to make a difference
At present, Husk has 80 electricity plants, and the aim is over 300 plants in the near future, with two-thirds of these in India. Swedfund’s long term capital fulfils several important functions in the expansion. Husk needs investors who can provide patient capital, with no expectation of a quick profit. Swedfund can also focus on strengthening Husk’s approach to sustainability. As a shareholder, we have the opportunity to work closely with the company’s management team, we can set up an action plan and assist with knowledge and training. This generates multiplier effects which benefit the whole community.
Facts: Husk Power Systems
▼ Husk Power Systems, which was established in 2008, develops, constructs and operates mini-grids in India and Tanzania.
▼ These supply households and small businesses with renewable electricity 24/7. The electricity is generated using solar cells and biomass, with the surplus being stored in batteries.
▼ As from 1 March 2017, Husk owns and operates 10 HMG plants (hybrid mini-grid), 55 solar cells and 16 biomass plants in India.
▼ In addition, Husk owns and operates 2 HMG sites in Tanzania.
▼ Electrification is being given an increasingly higher priority in collaborative development projects. Mini-grids play an important role in complementing electricity distributed through the national grid, both through extra capacity and reliability.
▼ Swedfund’s investment: Equity USD 5 million
▼ Tanzania and India are in columns 1 and 3 respectively on the DAC list SDGs in focus through our work
SDGs in focus through our work
▼ SDG 7.1 By 2030, ensure universal access to affordable, reliable and modern energy services.
▼ SDG 7.2 By 2030, increase substantially the share of renewable energy in the global energy mix.
▼ SDG 8.5 By 2030, achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value.
▼ SDG 13 Take immediate action to combat climate change and its consequences.
2 https://www.iea.org/topics/energypoverty/. International Energy Agency, Energy poverty. Downloaded 25 October 2017.
3 The Business Case For Off-Grid Energy In India by, www.theclimategroup.org in partnership with Goldman Sachs. 2018, page 31.
4 http://www.worldenergyoutlook.org/resources/ energydevelopment/energyaccessdatabase/. International Energy Agency’s database. Downloaded 25 October 2017.